EU to help Ireland after SR Technics moves to Malta

The European Commission has approved aid of €7.4 million to Ireland to help 850 redundant workers of aircraft maintenance firm SR Technics back into employment. The application will now be sent to the European Parliament and EU Ministers (the EU's Budgetary Authority) for approval.

Last March, the EU dismissed claims by Irish MEPs and officials that Malta used state aid or EU funds to attract SR Technics to set up a base on the island.

Malta Enterprise is to lease a new €40 million hangar to SR Technics for 30 years. The company plans to employ some 350 technicians at its aircraft maintenance centre, which will focus on the serving of EasyJet aircraft.

SR Technics CEO James Stewart said when he visited Malta earlier this year that his company was going through a period of setting up a strategic plan for long term growth and part of that plan was to develop a lower cost aircraft maintenance facility in Europe.

"We wanted to be more competitive. At that time all our facilities were in Western Europe, and they all had a very high cost base. So we needed to get a better mix in terms of value for our customers. We looked at around 53 different locations in Europe or in the fringe of Europe, and decided that Malta was the right place to be."

Ireland said the dismissals at SR Technics were a consequence of the financial and economic crisis which exacerbated an already difficult situation for operators in high cost regions (such as SR Technics) and led airlines to pursue cost-cutting more vigorously.

"Due to the crisis, the model followed by airlines changed from one of 'full service' MRO contracts to specialisation and contract division. In this way the airlines replace a single MRO contract with several smaller ones, selected for cost advantages. SR Technics lost two significant contracts for this reason: one with Aer Lingus and one with Gulf Air"

The package of EGF assistance for the former workers of SR Technics will help 850 of the most disadvantaged workers back into employment by offering them guidance and training, on- and off-the-job training, third level education and promotion of entrepreneurship and self-employment. The total estimated cost of the package is almost € 11.5 million, of which the European Union has been asked to provide EGF assistance of € 7.4 million.